Swedish Krona Surges on Hawkish Central Bank Comments

By Forexyard: By Russell Glaser The SEK continues to trade higher after the Riksbank sounded more hawkish than expected and the German Constitutional Court Ruled in favor of the Greek bailout but said its ruling is no blank check for additional bailouts.

Marc Chandler submits:The Swedish krona has generally trended higher against the euro since the global financial crisis bottomed toward the end of Q1 2009. The euro recorded its multi-year lows against the krona in late September near SEK9.09.

Jeff Diercks submits:The PowerShares DB G10 Currency Harvest Fund (symbol "DBV") may not be familiar to a lot of you.

Marc Chandler submits:Norway was the only major European country to hike rates last year and did so twice in H2 09. The central bank indicated after the December rate hike that if the krone appreciates more than expected, it could delay or limit further rate hikes. The krone has rallied about 3.25% on a trade-weighted basis over the past few weeks, during which time the euro has fallen 4.3% against the NOK.

Marc Chandler submits:One of the most important developments in recent days has been the sharp backing up of global interest rates, spurred primarily by indications that, contrary to expectations, U.S. fiscal policy is in play again beyond simply preventing the expiration of the 2001 and 2003 tax cuts. While the rise in U.S. rates has helped keep the dollar supported, we are concerned that two-year German rates have risen even faster than two-year U.S.